Most dividend stocks pay their investors quarterly. That makes it tricky for those seeking passive income to help offset their monthly expenses. They either must accept lumpier income streams or buy dividend stocks on different cycles to stagger their payments so they get roughly the same amount of income each month.
However, some dividend stocks make it easier to match income with expenses by paying monthly. Three in the real estate sector investors should consider this month are Agree Realty (NYSE: ADC), Gladstone Land (NYSE: LAND), and STAG Industrial (NYSE: STAG).
Agree Realty: New to the monthly income game
Agree Realty switched to paying its dividend monthly this year. The retail REIT, or real estate investment trust, currently pays $0.207 per share each month, which implies a 3.7% yield at the current share price.
That payout is on solid ground. While Agree Realty focuses on the retail sector -- which is facing significant headwinds from the accelerated adoption of e-commerce and the pandemic -- it offsets those risks by owning stand-alone properties triple net leased to primarily essential retailers with investment-grade credit ratings.
This focus on high-quality retail tenants enabled the REIT to collect at least 99% of the rent it billed in each of the last six months. The company compliments that resilient portfolio with a reasonable dividend payout ratio and solid investment-grade balance sheet.
That gives the REIT the financial flexibility to expand its portfolio. The company made more than $1.3 billion of new investments last year and aims to acquire an additional $800 million to $1 billion of properties in 2021. Those new additions enabled the company to increase its dividend by 6.2% over the past year. Meanwhile, future additions should allow for continued growth in 2021 and beyond.
Gladstone Land: A steadily growing monthly dividend
Gladstone Land pays a $0.04495-per-share monthly dividend. The specialty REIT focused on farmland has paid 95 consecutive monthly dividends since its initial public offering in 2013 and has increased its payout 21 times in the last 24 quarters. At the current rate, the REIT yields around 3%.
Gladstone Land leases farms to farmers primarily under triple net leases, enabling it to generate steady cash flow to support its dividend. The REIT hit a milestone level in the past year by growing the value of its farmlands to over $1 billion. It purchased 26 farms last year for $256 million, enabling it to steadily increase its monthly payout.
Gladstone has continued to be active this year, as it's already made several acquisitions. These deals have it on track to continue growing its cash flow, which should support a growing dividend.
STAG Industrial: An industrial-powered monthly payout
STAG Industrial currently pays a $0.120833-per-share monthly dividend. At the recent share price, that works out to a 4.2% yield.
The industrial REIT supports that payout with a diversified portfolio of single-tenant warehouses, light manufacturing facilities, and flex/office buildings across more than 60 U.S. markets. It also has a solid balance sheet and reasonable dividend payout ratio. That gives it the financial flexibility to continue expanding its portfolio via acquisitions and select redevelopment and development projects. The company currently expects to make $800 million to $1.2 billion of acquisitions this year, which should grow its cash flow, enabling the REIT to continue increasing its dividend.
Three great ways to earn some passive income each month
Agree Realty, Gladstone Land, and STAG Industrial stand out in the REIT sector because they pay monthly dividends. More importantly, they support their payouts with rock-solid portfolios and financial profiles. That gives them the flexibility to continue expanding, which should support further dividend growth in the coming years. That makes this trio excellent options for those seeking a passive monthly income stream.